CALGARY, Alberta – TransCanada Corp scrapped plans to build a port in Quebec and said on Thursday it will have only one crude oil export terminal for its Energy East pipeline project.
The move comes days after TransCanada asked the U.S. State Department to pause its review of the company’s long-delayed Keystone XL pipeline, a request that Washington turned down amid speculation President Barack Obama will ultimately reject the pipeline.
The 1.1 million barrel-per-day Energy East project is intended to carry crude from Alberta across Canada to New Brunswick.
Calgary-based TransCanada had originally planned to build two ports for shipping crude overseas by tanker – one at the pipeline terminus in Saint John, New Brunswick, and the other in Cacouna, Quebec.
However, the company abandoned the Cacouna location in April after environmentalists raised concerns about the impact on beluga whales in the St. Lawrence River. Since then, the company had been looking at the feasibility of other locations in Quebec.
CIBC World Markets analyst Paul Lechem said scrapping the second export terminal did not affect the financial viability of Energy East as Saint John had always been intended as the primary port and there were other ways of transporting crude to Quebec, such as Enbridge Inc’s Line 9 pipeline.
“The project was not predicated on that port. It was largely put in place to allow tankers to take crude off the line early, thus avoiding some of the tolls all the way to the east coast,” Lechem said.
TransCanada said on Thursday it had reached the decision after listening to local communities, stakeholders and customers, and it will be amending the Energy East project application before the National Energy Board.
“Today’s announcement demonstrates our dedication to listening and delivering a vital infrastructure project that will provide significant economic benefits to all provinces along the pipeline’s route,” said TransCanada chief executive Russ Girling.
Earlier this week Girling had said the company was “very close” to reaching a decision on the second export terminal.
Energy East will still supply crude oil to the Suncor Energy and Valero Energy refineries in Quebec and is expected to come into service in 2020, subject to regulatory approval.
TransCanada shares were last down 0.4 percent at C$44.92 on the Toronto Stock Exchange.
(Editing by Jeffrey Benkoe and Frances Kerry)
This article was from Reuters and was legally licensed through the NewsCred publisher network.